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Italian oil and gas industry services provider Saipem and Subsea7 have reached an agreement for a potential merger to establish a “global leader” in the energy services sector.
The surviving entity will be known as Saipem7.
Saipem and its Norwegian rival did not disclose the financial terms of the deal, which, according to Reuters, is valued at around $4.63bn.
Saipem7 is said to have a combined backlog of €43bn, revenue of approximately €20bn and earnings before interest, taxes, depreciation and amortisation (EBITDA) exceeding €2bn.
It will be equally owned by shareholders of both companies and is set to be listed on the Milan and Oslo stock exchanges.
The transaction is expected to be completed in the second half of 2026, pending board approvals and a merger agreement expected by mid-2025.
Saipem7 will operate across four main business segments: offshore engineering and construction, onshore engineering and construction, sustainable infrastructures and offshore drilling.
The offshore engineering and construction segment will operate as a separate autonomous company.
This division is expected to contribute approximately 83% of the group's EBITDA, based on the past 12 months as of 30 September 2024.
The onshore engineering and construction business will focus on risk reduction and maximising profit.
Meanwhile, the sustainable infrastructures business will strengthen its position in Italy and potentially expand internationally.
The offshore drilling division aims to sustain its EBITDA and cash flow.
Supporting the merger, CDP Equity, Eni and Siem Industries, which represent approximately 29% of Saipem, have signed a separate agreement, agreeing on a shareholders agreement effective upon completion of the merger.
Under this agreement, the chairman of Saipem7 will be appointed by Siem Industries, while the CEO will be designated by CDP Equity and Eni.
It is envisaged that Alessandro Puliti will take on the role of CEO for the combined company, while John Evans is expected to be the CEO of the offshore business of Saipem7.
Eni CEO Claudio Descalzi said: “With this transaction we are creating a global leader of significant industrial and technological value. Over the past few years, Saipem has continuously improved its operational and financial performance, achieving a position of excellence that enables it to play a leading role in this major transformation. This is a great achievement that fully reflects the support we have provided in our role as shareholders.”
In September last year, Saipem secured a $2bn (£1.58bn) oil and gas field development contract from Saudi Arabia.